logo    CDD FAQ - Companies AMLHub Frequently Asked Questions





General

You are required to obtain information on the nature and purpose of the proposed business relationship with their clients. It includes understanding what the client is trying to achieve, how much business (volume and value) is expected, and how regular their interactions will be.

‘Nature’ refers to the client, products or services i.e. what the client is bringing to the business relationship, including expected volumes of business and how regular interactions might be.

‘Purpose’ relates to the uses that the client intends to put the products/services to i.e. why the client wants the particular product or service and what they are using it for.

When loading deals on the AMLHub these questions are asked and recorded.

Onboarding

You will need to verify the company by obtaining the following information from the Companies Office's Website:

  1. full name of the company;
  2. full address of the company’s registered office and principal place of business;
  3. registration number of the company;
  4. names of the directors.

Additionally, you will need identify the beneficial owners of the company and then onboard them to the same standard as individuals/natural person clients. Refer to the FAQ on individuals/natural persons or your Compliance Programme for details on how to onboard individuals/natural persons.


A beneficial owner is any individual (natural person) who satisfies one or more of the elements below:

  1. the individual has effective control of the client;
  2. the individual is a person on whose behalf a transaction is conducted;
  3. the individual owns more than 25% of the client or person on whose behalf a transaction is conducted (e.g. direct/indirect shareholders).

If there are no shareholders over 25%, you will need to onboard the directors and those who exercise effective control over the company.

Our CDD webinars include worked examples of how to onboard a company client, please refer to the following links:

  1. CDD for Compliance officers https://youtu.be/dEVOpyTWelI
  2. AMLHub and CDD for sales (Part One) https://youtu.be/97RQ8dIrDFQ
  3. AMLHub and CDD for sales (Part Two) https://youtu.be/Xu_qLAv39uA
Onboarding

From an ML/FT risk perspective charities (particularly overseas charities) are considered high risk. However, certain attributes can reduce risk, specifically:

  1. if the charity is registered in New Zealand; and
  2. if the charity is well known and its charitable purpose is clear.

Where a charity is a client/beneficial owner and therefore is subject to CDD requirements, the following steps will need to be taken:

  1. Search the charity on the following website to confirm that they are a registered NZ charity https://register.charities.govt.nz/CharitiesRegister/Search
  2. You will need to retain the evidence of registration on your client files.
  3. Identification of the officers of the charity, whose details are listed on the charities website.

In order identify the officers you will need to identify the name, date of birth and address of each of the individuals, as per the Code of Practice/your Compliance Programme. You will not always need to identify all officers, as some may not be deemed to necessarily have effective controls. Your decisions in regards to effective control will need to be documented on the client file.

Where a Charity is a trust structure, you will need to perform Enhanced CDD on them. However, this is often very simple as registered entities are required to upload their annual returns on the Charities’ website.